Business hails Hague jurisdictional treaty draft

The International Chamber of Commerce today said a draft treaty governing jurisdiction in cross-border business contract disputes was shaping up to give a boost to trade.

Hailing the draft convention assembled last week by the 64 member governments of the Hague Conference on Private International Law, ICC Secretary General Maria Livanos Cattaui said: “The document that is now going forward for final negotiations is on the right lines.”

Business experts support the decision to focus the convention on basic business-to-business needs for certainty regarding the choice of national court when a dispute arises and that national court judgments will be enforced.

A special government commission is now to negotiate the draft in The Hague in December, and once that hurdle is crossed, a full-scale negotiation known as a diplomatic conference is scheduled for next June.

Business has long maintained that the Convention on Jurisdiction and Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters would be beneficial in today’s global economy with its proliferation of cross-border contracts.

The importance of jurisdictional certainty in international contracts was underlined by an ICC survey of 100 leading companies submitted to the government representatives negotiating the draft convention in The Hague.

Forty of the companies consulted said that there had been occasions when a significant business decision had been determined by jurisdictional uncertainty. Companies participating in the survey together have more than three million employees.

Michael Hancock of Salans in Paris, the international business lawyer who presented the survey findings to the Hague negotiators on behalf of ICC, said: “The draft now going forward satisfies the principal business expectations that the Convention will increase the respect given to agreements between businesses regarding choice of national court and enforceability of judgments.”

He added that the predictability of judgments would be strengthened under the present draft by limiting the right of the national courts of choice to dismiss proceedings.